A technical problem presently exists in the attempt to use modern day computing technology in state governments. Generally the problems facing state agencies when they attempt to upgrade their systems are the same as those facing any business today. That is, huge investments in legacy data processing systems and personnel training cannot be discarded and quickly replaced with more modern Internet-based, business-to-business type systems without large expenditures of time and money. In state governments these problems are exacerbated by the difficult and time-consuming legislative appropriations process. Data processing operating and development budgets are typically prepared annually by each State Agency with some states consolidating these types of budgets into one Information Technology Services budget. However, the requests for more and more budgeted funds to develop new eCommerce systems are becoming increasingly more difficult to get quickly considered by the various agencies, departments and bureaus of the state, and ultimately considered and passed by the legislative budget and spending committees. Moreover, recent highly publicized expensive system development failures, such as one state's $50 million dollar Department of Motor vehicle Registration System which failed to work, make the legislators reluctant to spend the time to try to be assured that a proposed new data processing system will work, and will be as cost effective as proposed.
Accordingly there is a need for a new funding model wherein the services suppliers can partner with the state to make use of currently existing portals, processing facilities and eCommerce services such as electronic payment processing, auctioning, calendaring, etc., whereby this partnering can benefit both the state through lower development and operating costs, and benefit the service provider through development and service fees funded partially by the state and partially by the vendors and clients doing business with the state. Such a model could ease the budgeting burden on the state for development systems by using already existing eCommerce systems of the service provider and can provide operational funding to the service provider through lower usage fees to the state and through new fees paid by the vendors and other clients of the state services.
One of the areas of State Government which has been partially automated in some states and for some time is the area of procurement of state supplies. Supplies ranging from motor vehicles purchase and registration, to office furniture and supplies, to special supplies to particular agencies like police departments, fire and public safety departments, jails, courts and other related legal services The consolidation of many of these services has not been possible in the past generally because of the legacy investments and high cost of replacement systems. Internet-based eCommerce systems have made this now a tractable problem to solve. For example, as reported in the Wednesday, May 10, 2000 edition of InternetWeek at www.internetwk.com, an article titled “Auctions Pay Dividends for Gov't” points out that the federal government has “plunged into the world of online auctions for buying goods and selling surplus items.” The article points out that “online auctions will reduce overhead” . . . and provide “a means for increas[ing] government buyer's options.” The Federal Supply Services (FSS) (which buys $17 Billion annually) auctioned off surplus items last year on the Internet including more than 100,000 items for $260 million using the eBay auction model. The article goes on to indicate the U.S. Navy and the naval Supply Systems Command is using existing eCommerce systems to save tax dollars in procurements and improve service to their customers, reporting in one instance a saving of 29% from a budgeted $3.3 million purchase of ejector seat components.
These is a need in the art for a system and method for a new model of Internet-based procurement systems which can minimize the state's development costs by using existing Internet proven eCommerce solutions, can save the state money in procurement costs, related overhead costs and can reduce the need for excess budgets, and can gain these benefits through vendor participation fees and client transaction fee usage.